How to save 100k as a 22 y/o
Starting full time in July and hopefully I’m not the only one out there in this boat, but would love advice from anyone on how I should allocate my savings.
Have $13k in student loans to pay off and ~$2k in rent each month.
Any advice would be appreciated!
Bro if you’re living in NYC you ain’t saving shit except your 401K and your bonus. You should be able to pay off $13k loans but other than that you’re not gonna save a ton in your first year or two, especially if you’re going out on the weekends/eating out.
Let me guess you just watched some video saying the first 100K is the hardest. Not shitting on you, but they are right. Want to know why - you have to establish good saving habits well in advance of your high earning days otherwise when you do make the big busk you won't have the good habits. After Taxes Analyst don't really make all taht much and over the course of 2-3 yrs you should be able to save 100K. Its going to be a slow process. Lets say you live in a shit hole and a save an extra $500 a month in rent - great thats only 6K - sure compound this and it could be a lot, but life is also about living too. I would set a budget and figure out where you are willing to cut / where you want to spend and set up good habits and you will get to your goals just fine.
Depends a lot on rent and how frugal you are. I don't spend much, so this is my breakdown:
Hope this is helpful! Definitely don't need to mimic this. I think most of my peers have higher rent than me and get drinks / eat out a lot more than me, so I think my breakdown is atypical.
Does 6% employer match and 12% total defined contribution essentially mean you’ll save $12k from your own contribution and $6k from employer? So essentially $18k in my 401k by end of year?
There's a cap on the employer contribution that's like a ~4% of your salary, so $4,000 is the maximum match. You can choose to allocate part of your bonus to fill up the rest of the 401K as well if salary doesn't get you there.
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Figure out a way to live rent free. Living at home with your parents would be the most obvious way if that's an option.
I disagree - I did this for a couple years right after graduation, and while I was able to save a lot of money, my life was ass. All I did was commute, work, lift, commute, and sleep. An investment banking analyst is making more than double my first job out of college - no reason to live at home. Go live with roommates and enjoy life.
This will get a lot of hate from the usual "go live and the city and have fun!!" crowd, but it's really the ONLY way outside of making extra outside of the job which in IB well uh good luck. Living with parents effectively cuts your personal expense line item down to zero. Can't do that anywhere else or any other time in your life. I wish I could live at home rather than make some landlord and utility provider rich.
But you're not living life if you don't have your own place or sharing with roommates. Imagine trying to have friends over. Or a girl.
Here’s a list of things that have helped me:
1. Have a group of friends who enjoy doing things besides drinking at bars / clubbing. Drinks are expensive in the city. Try and pre-game before you go out. See if the add a stop option on uber is cheaper than all your friends getting in separate Ubers. Lots of cheap activities to do in the city.
2. Stay on your parents health insurance (if it’s an option, their plan is probably cheaper than yours)
3. Put as much money into your 401k / Roth IRA as is possible given your circumstances. Since it’s taken out of my paycheck and doesn’t hit my bank account, I forget it exists and can’t spend it.
4. Take advantage of all the money your firm gives you (gym stipends, wfh setups, lunch, Ubers home, cellphone reimbursement etc). Its free money.
5. Don’t spend money on stupid stuff you don’t need. (Not saying don’t spend money, just think before you buy)
6. Pay your bills on time to avoid late fees and interest
Don’t most banks provide full health insurance? Dental and all
It’s not free and coverage varies (may not be as good as parents plan).
Is it possible to save 100k in Houston in your first year as an analyst? At an EB so assume pay is considerably above street.
Definitely possible in HTX, after my 2nd year bonus I will have cleared 200k in savings. Put away ~40% of my gross paychecks and still have enough to do whatever I want on the weekends.
Do you have general tips on living in Houston about how I can save money?
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